New Zealand plans to build wellbeing into budget decisions

By on 03/10/2018
New Zealand's budget will consider people and the environment alongside finance (Image courtesy: Jean-Pierre Brungs).

The public sector needs to focus more strongly on improving the current and future health of people and the environment, the government of New Zealand has said.

The country’s Treasury is consulting on amendments to the Public Finance Act that will ensure that ‘wellbeing’ objectives such as improving housing, reducing child poverty and cutting greenhouse gas emissions are considered alongside fiscal matters in budgetary decisions.

The annual budget policy statement could then set out how the government is planning to make progress on the objectives through the budget, while meeting rules on budget responsibility, including net debt targets.

The Treasury is also proposing to introduce indicators on wellbeing and finance, against which it will report.

Considerations beyond cash

The consultation states: “This government believes that economic growth, as important as it is, will not alone guarantee improvements to people’s lives, particularly for the most vulnerable, or the ongoing health of the natural resources that sustain us.

“A wider framing is needed to measure New Zealand’s progress, to develop and assess fiscal policy and support decision-making. This means looking beyond well-established measures like gross domestic product (GDP) – which remains an important marker of economic activity, but does not capture important facets of wellbeing for the environment, people, and communities.”

There are “significant gaps” in the measurement and monitoring of wellbeing and sustainable development, in the coherence of policy development to support ministerial decision-making, and in collective action by delivery agencies in the pursuit of wellbeing, the Treasury document states.

How’s that done?

The Treasury will draw up a Living Standards Framework to inform budget priorities, and take a more collaborative approach to setting these. The framework will include natural, social and human capital as well as financial capital. It will also consider key risks, and the resilience of future wellbeing in the face of change or shocks, according to the consultation.

The move follows publication earlier this year of discussion papers outlining the department’s initial thoughts on how human, natural and social capital could be taken into account in the country’s budget.

A Treasury official said that ministries would have to work together in a new way to “draw a wellbeing link” between departments such as those responsible for health, education and housing, the Public Finance International website reported earlier this year.

The government’s consultation is open until 12 October.

About Catherine Early

Catherine Early is a journalist and editor specialising in government policy and regulation. She writes predominantly about environmental issues and has worked for the Environmentalist, the ENDS Report, Planning magazine and Windpower Monthly, and also written for the Guardian, the Ecologist and China Dialogue.

One Comment

  1. Richard MacGregor

    04/10/2018 at

    Look out New Zealanders, your taxes just got doubled (it’s for your own good) via “ministerial decision-making”.

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